Distribution more important than product portfolio now: Brand experts tell Patanjali

Patanjali took more than 10 per cent hit in its standalone consumer goods revenue for the year ending March 2018

e4m by Madhuwanti Saha
Published: Nov 27, 2018 5:56 AM  | 4 min read
acharya and ramdev

A decline of more than 10 per cent in Patanjali’s standalone consumer goods revenue for the year ending March 2018 to Rs 8148 crore has put a serious roadblock, a first in many years, in what was seen as a formidable force by several MNCs. The decline is due to several reasons, according to a report by Care Ratings. It happened for the first time in five years due to Patanjali not adapting too well to the GST regime and hiccups in its infrastructure and supply chain, says the report.

 

The company had been in what was seen by competitors as an unstoppable mode since last year when it diversified even further by launching its packaged drinking water, dairy and apparel business (the last two portfolios, this year). We spoke to a few brand experts to know what they feel is the way forward for Baba Ramdev's company for it to continue its great run. Distribution strength, stringent quality control, a pause in introducing new products were some areas of focus, according to our brand experts.

 

Brand expert Jagdeep Kapoor, MD, Samsika Marketing Consultants, believes the width of the product portfolio has to be narrow while that of distribution, wide. “The drop is because of two reasons: robust widespread distribution and focus. They need to have width of distribution in every big and small town, not the width of product portfolio. Unless they are available in every neighbourhood, kirana and chemist shops, the growth gets under-pressure," he said.

 

Lulu Raghavan, MD, Landor Mumbai, said, “There’s only so much that a brand can stretch. In sub brands, Patanjali is confronting focused competitors (Parle and Britannia in biscuits and Unilever in personal care). How are you going to be the winner in every category when you compete in so many areas under the same brand name? Dynamics of each of these categories are very different. The minute you open yourself up to proliferation you are in categories that need premiumization and varienting. The whole ecosystem of the brand needs to be looked over to see how much more growth of this limitless stretch of Patanjali can be accommodated."

So as any brand starts proliferating, certain questions need to be asked, said Raghavan: “Can they do it at the same quality and consistency? Can they be sharply positioned against each of the top competitors in each category?”

Undoubtedly, all of the experts we spoke to reinstated the role of the homegrown FMCG player for tapping the immense potential of ayurveda and natural products space. As a result, it led other mainline players to notice and work on this space, create propositions, put right resources behind the platform, and develop the products and marketing mix, feels Anupam Bokey, VP Marketing (CMO) RPSG FMCG Business; Brand: Too Yumm! He referred to Ayush by Unilever. “As these companies have their respective category strengths and credible brands they have created competitive products, relevant proposition, have the necessary expertise in machinery and distribution strengths, hence it has become more of a level playing field now. Even consumers are aware of alternate options from mainstream players in skin, hair and oral categories and have more offerings within the Ayurveda space. That's possibly the reason why Patanjali would face much more competition in the environment now and in the future," said Bokey.

Raghavan had another point to make. “People were buying into their philosophy in the initial years. As a result, Patanjali went through the nascent stage where they achieved as much as they could. Now the next challenge of growth and stability is where they have to get their next 70 million, and these may not necessarily be blind devotees," she said.

However, Kapoor is confident of Patanjali overcoming this hurdle as he said, “Patanjali is otherwise robust and revolutionary. It now needs to increase the number of outlets rather than product range.”

We reached out to Patanjali for a comment but they did not respond.

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